Deutsche Bank, the underdog in the race to run the IPO of a large AIG unit, has come out on top.

The German bank has been chosen as one of two global coordinators to run the IPO of American International Assurance (AIA), beating out Goldman Sachs and Citigroup, which ran the aborted auction of the Asian life insurer earlier this year.

Morgan Stanley, the other global coordinator, is no surprise. The bank has been advising the Fed since the September implosion of AIG, and on top of its own expertise, regulators wanted it in.

At a time when few deals are gettting done, the AIA flotation will be a big one. In fact, it will be the biggest Hong Kong IPO since April 2007 and a fee bonanza for the banks. Coordinators and bookrunners typically earn around 3 percent in fees — so a $5 billion IPO could produce at least $150 million in fees split between the banks. More than 30 banks applied for the job.

Deutsche, of course, is no babe in Asian IPO woods. As our colleague Michael Flaherty in Hong Kong points out, Deutsche was the joint global coordinator of China Life’s $3.48 billion IPO in December 2003, and was among the banks that handled the $19.1 billion IPO of Industrial and Commercial Bank of China in October 2006. 

The banks that did not make the cut still have hope, though. There are spots left to be filled for bookrunners and co-managers of the IPO, which is not expected to actually happen until the first half of 2010.